Audio electronics maker Merry Electronics Co (美律) is expected to see accelerated demand after brand clients launch new products, which would boost its “true wireless stereo” (TWS) earphones and gaming headsets, while the work-from-home trend should increase its enterprise headphone sales, analysts said.
Apple Inc launched its iPhone 12 models last month, while Microsoft Corp and Sony Corp are to introduce their Xbox Series X/S and PlayStation 5 game consoles this week.
The demand for TWS and gaming devices would help Merry overcome the impact of the COVID-19 pandemic, when overall demand turned weak in the first half of the year and many projects were put on hold or delayed, analysts said.
“Merry’s revenue and earnings for 2020 might peak in the fourth quarter due to the peak season effect of TWS earphone shipments and iPhone speaker shipments, while sales of gaming headsets are expected to remain high,” Capital Investment Management Corp (群益投顧) said in a note on Friday.
The company’s fourth-quarter revenue is estimated at NT$13.59 billion (US$471.47 million), up 34.04 percent from NT$10.14 billion in the third quarter, Capital said.
Merry last week reported revenue of NT$4.19 billion for last month, its second-highest monthly sales following a record high of NT$4.96 billion in September.
Headphones accounted for 72 percent of sales, while speakers made up 25 percent and others, 3 percent, company data showed.
In the first 10 months of the year, cumulative revenue reached NT$25.94 billion, down 16.99 percent year-on-year. Total net profit for the first three quarters was NT$743.96 million, down from NT$2.08 billion a year earlier.
Earnings per share were NT$3.6, compared with NT$10.24 the previous year, Merry reported on Oct. 29.
Analysts said the demand for TWS earphones and gaming headsets is likely to continue strong into next year as more new products are launched by clients following postponements earlier this year, while Merry has also penetrated into Apple Inc's tablet, smartwatch and earphone supply chains.
Merry's business is expected to resume growth next year, said Capital, which projected a 12.57 percent growth in revenue and a 22.71 percent increase in earnings next year after the estimated contractions of 2.89 percent and 33.3 percent in revenue and earnings this year respectively.
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